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Merit-based financial aid to students from low-income families and its effects on university enrollment

Project researchers

In 2009 the Autonomous province of Trento has started to play a leading role in encouraging students from low income families to obtain higher education. Thus, a recent disposition assigns merit-based financial incentives to worthy students from low income families. More precisely, the scholarship will be paid to those who have successfully completed the last year of secondary school obtaining a final score which fall above 93/100 and whose family income is below a predetermined Icef threshold. The amount of the scholarship varies depending on family income and geographic location of the chosen university and its renewal depends on economic condition and academic performances.

In general, students from low-income families are at greater risk than other students of not enrolling or failing to complete university. Evidence from the US indicates that student decisions to enrol college respond positively to financial support. Furthermore, a number of research on the impact of tuition levels on enrolment decisions has shown that such decisions are sensitive to the amount of the tuition. Moreover, several studies have found that there is a direct effect of family income on child’s attainment, although there is substantial variation in the strength of the identified effect. Such studies indicate that the negative effect of low income on children’s attainment is still present even after controlling for family background and other key factors thought to affect educational outcomes.

The purpose of this project is to assess whether such financial support has a direct positive impact on university enrolment and on academic performances, regardless other potential drivers of their educational outcomes such as innate ability, parental education, parenting styles and home environment. The main question is, therefore, whether it is money itself that can make the difference in helping students to enrol and complete higher education.

The data for the evaluation come from an ad hoc survey that considers four cohorts of upper secondary school graduates in the province of Trento from 2009 to 2012. In this way, data on transitions from higher secondary school to university and on the performances of university students were collected, exploiting CATI and CAWI procedures. The data collection involved about 2,700 students each year. Technical infrastructures for the administration of questionnaires were made available by the Department of Sociology and Social Research of University of Trento.

The empirical analyses – carried out exploiting a regression discontinuity design – show that the programme does not exert any significant influence on the enrolment probability, but there are remarkable effects on the choice of the university location. More precisely, eligible students tend to enrol at university located outside the province of Trento, in school not present at University of Trento, such as, for example, Medicine, Veterinary, Pharmacy and Architecture.

2009 to 2015